VPK Group Launches Paper Machine In Normandy

The industrial site in Alizay, acquired in June 2022, has been converted by VPK into a sustainable development hub for circular economy. The group invested 200 million euros in the site to convert the existing paper machine into a recycled paper production unit based on carbon-free energy. The site strengthens VPK's position in the French and European markets through higher vertical integration.

The Alizay hub realises a strong circular concept. On an annual basis, the site will reuse 550,000 tonnes of recovered paper coming from a 250-km radius around the mill, minimising CO2 emissions from production and transport. In turn, a biomass boiler and a water treatment plant produce green energy used during the paper production process.

Meanwhile, the new paper machine is in start-up and creates an additional annual production capacity of 500,000 tonnes of recycled paper for corrugated board. Together with VPK's six other paper mills, this accounts for an annual production of 2,000,000 tonnes, of which 1,000,000 tonnes in France.

Thanks to VPK's integrated model, Alizay's additional paper production will mainly find outlets in VPK’s packaging processing sites in France and the UK. In this way, the group is strengthening its integration and reducing its dependence on external paper suppliers.

fit2size - the greenest e-commerce packaging on the market
Meanwhile, the corrugator for the production of innovative "Z-fold" corrugated board was also launched in Alizay. A technology that makes it possible to produce tailored packaging, eliminating void fill and reducing logistics costs.

Moreover, a new digital printer was installed that can print packaging in high definition at an unparalleled high speed, the first machine of this type in France. The new line offers a wide variety of applications, such as printing the inside of e-commerce packaging, point-of-sale displays and other marketing activities, and opens up a new world of possibilities.

Further expansion of the cores division in Portugal and Spain
In March this year, VPK Group completed the acquisition of the Arteche Paper group. This further expands its cores division with an additional paper mill in Porto and five converting sites in Portugal and Spain. With this acquisition, Corex, VPK Group's cores division, includes 4 paper mills that supply the raw material for processing at the 29 converting sites.

Committed to the energy transition
Together with our specialised teams, we continue to work on our own energy transition to increase our contribution to Europe's Green Deal objectives of being the first carbon-neutral continent by 2050.

To achieve this goal, the group is implementing several renewable energy and decarbonisation projects. For example, we are gradually switching to biomass, co-generation and efficient use of recovered heat from production processes at all our sites.

By reducing and greening our own energy consumption, we also contribute to achieving our customers' sustainability goals.

VPK Group maintains its strong and solid position
Despite the challenging market conditions, initiated by the energy crisis and the high inflation, VPK Group managed to maintain its strong and solid position and deliver a robust result with an annual turnover of 2.1 billion euros in 2022. An increase of 22% mainly driven by implemented price increases to recover significantly increased energy costs and the omnipresent cost inflation. Operating cash flow (EBITDA) was 276 million euros (13%). VPK Group realised an investment programme of 135 million euros, a significant part of which was in the further improvement of the sustainability of its operations.

With our strong long-term vision, we continue to invest in strategically important projects to ensure future sustainable growth in circular packaging. Thanks to VPK’s integrated business model, the environmentally friendly characteristics of paper and packaging, a diversified product portfolio and geographical spread, we see ourselves well positioned to continue our sustained growth and cope with current market dynamics.